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Mayor expected to continue to make case general fund reserves are too conservative
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Manteca’s elected leaders are expected to adopt a spending plan for the fiscal year starting July 1 when they meet tonight.

In all likelihood it shouldn’t raise much of a ruckus.

That, however, isn’t the case with $13.9 million the federal government is sending Manteca’s way in the form of COVID-19 relief.

That’s because the money is not included in the fiscal year 2021-2022 budget. Staff is planning a council study session with the council to devise a spending plan for the relief funds.

The budget being considered for adoption when the council meets at 7 p.m. at the Civic Center, 1001 W. Center St.,  includes $49,719,784 in expenditures against $41,795,379 in revenue for general fund activities that cover day-to-day government services such as police and fire protection as well as street maintenance and parks.

Overall the city budget calls for spending $142.8 million with revenues projected at $160.4 million. That includes enterprise accounts such as sewer, solid waste, and wastewater funded by users fees, restricted funds such as fees collected on growth for specific purposes, and the general fund.

The relief fund spending plan that will emerge at an upcoming workshop is likely to be a debate of sorts on the city’s general fund reserve policy.

Based on the fact general fund spending is expected to exceed revenues by $8  million in the next 12 months by drawing down on reserves, staff is likely to recommend backfilling general fund reserves with $8 million of the $13.9 million based on the currently adopted council reserve policy.

Mayor Ben Cantu has made it clear he believes the current reserve policy is overly conservative. Cantu has advocated cutting it back the fiscal stability reserve for cash flow and contingencies to 20 percent of the overall general fund budget. It had been at 25 percent for years until the council in 2018 kicked it up to 30 percent.

Based on the proposed budget Cantu’s position would free up $4.1 million by reducing the general fund reserve to 20 percent.

Other general fund reserve polices now in place include:

*a pension stability reserve set at 5 percent of operating expenditures.

*an economic development reserve at $2.5 million with excess money coming from residual property tax from property in the RDA going into undesignated reserves.

*capital facilities set at 3 percent of operating revenues to 3 percent with a cap of $2.5 million.

* technology reserve set at 3 percent of operating expenses with a maximum cap of $1.5 million.

 Before the city’s books were determined to be out of whack, the combined general fund reserve accounts for the fiscal year that came to an end June 30, 2018 was pegged at $21,051,596 plus $468,590 in an unassigned reserve for a total of $21,520,186.

The city has spent almost 10 months trying to unravel its finances after discovering the general ledger wasn’t being kept current, revenues and expenditures were being posted to the wrong accounts, audits had not been completed and inter-fund loans were made that weren’t paid back.

The untangling is almost over.

The audited fund balances for the 2019-2020 fiscal year is expected to be completed by September. A similar audit for the fiscal year ending June 30 is projected to be done by December.

Councilman Charlie Halford has repeatedly said he is uncomfortable about committing to any significant new expenditure until fund balances are known instead of merely being estimates.

There appears to be general consensus that if any of the COVID-19 relief money is spent it will go toward one-time expenditures and not reoccurring expenses such as salaries.

As for what the city could spend the federal funds on, there is a lengthy list of which street projects dominate.

If the amount the council decides it should spend is $5.9 million after backfilling reserves with $8 million or even if it is the entire amount of $13.9 million it is likely to make only a dent in the identified needs.

The biggest project the city has invested money in right-of-way acquisition and engineering to move forward is the McKinley Avenue interchange.

It is arguably the most pivotal project that has an expiration date for environmental studies and engineering that has been completed.

It is also essential for development of the city’s family e entertainment zone, its negotiations to secure a 200-room expansion of the 500-room  Great Wolf indoor waterpark resort that opens June 29, and to reduce traffic congestion on the Airport Way corridor near the 120 Bypass.

The most cost effective way to improve congestion on Airport Way by modifying the interchange is $24 million plus to repeat the diverging diamond effort at Union Road. That is on top of the $130 million tab to upgrade the entire Airport Way corridor through Manteca.

The upgrade of the Airport Way interchange is not on any city project list and no work has been done. McKinley Avenue is the exact opposite but has a funding shortfall.

The city already has received half the amount of the federal relief funds with the balance expected in early 2022.


To contact Dennis Wyatt, email